ECS2602/102/2/2012
Tutorial letter 102/2/2012
Macroeconomics 2
ECS2602
Department of Economics
Workbook:
Activities for study units 1 to 9
Bar code
, 2
IMPORTANT VERBS
As a student, you should know exactly what is expected when certain verbs are mentioned
in an activity, check list or examination question. In economics, the most common verbs
used are:
Verb Description
Identify the similarities or differences between facts, viewpoints,
compare
concepts or ideas.
contrast/distinguish/what
is the difference Point out the differences between certain objects or concepts.
between?
define Give a short and concise description of a subject or topic.
Name and give a short discussion of the characteristics of an
describe
object or topic.
discuss Discuss a topic by examining its various aspects.
Explain and clarify to ensure that the reader clearly understands
explain
you.
You should draw a fully annotated diagram. Make sure all the
axes and curves are labelled. The diagram must then be
explain with the aid of (a)
explained in a manner that the reader can follow and understand
diagram(s)
— in other words, tell the reader what is happening in the
diagram.
give/identify/list/name Give only the facts without any discussion.
Here you are usually required to explain your answer with the aid
illustrate
of a diagram (or figure).
, 3 ECS2602/102
An overview of the
South African macro-
economic
1
environment
Activities 1.1 to 1. 7
Once you have worked through this study unit, you should be able to give an overview of
the performance of the South African economy with regards to the following
macroeconomic aspects:
• economic growth
• business cycle
• stabilisation policy
• inflation
• unemployment
• balance of payments
• distribution of income
Indicate whether the following statements are true or false:
Statement True False
Activity 1.1
a. Macroeconomics studies the determination of the level
of output and income for a specific firm.
b. In macroeconomics we focus on the determination of
the demand for and supply of individual goods and the
determination of their prices.
c. In macroeconomics we focus on the interaction between
different markets, such as the goods market, the financial
market, the labour market and the foreign exchange
market.
d. Given the following information the economic growthrate
for year 2 is 4.67% :
Real GDP for year 1: R1 751 499 million
Real GDP for year 2: R1 673 259 million
e. Since 1993 economic growth has always been positive
in South Africa.
, 4
f. Real GDP per capita is widely used as a measure of
economic welfare or wellbeing of the residents of a
country.
g. In South Africa the real GDP per capita has con-
tinuously increased since 1993.
Activity 1.2
h. A business cycle refers to the expansion and contraction
of economic activity in a country.
Activity 1.3
i. The main focus of this macroeconomics module is the
study of determinants of the long-term growth potential
of an economy.
j. The impact of fiscal and monetary policy on the level of
output and income is an important topic in this module.
k. The main instrument of fiscal policy is the budget, while
the main policy variable is the interest rate.
l. A contractionary monetary policy implies a decrease in
government spending and an increase in taxation.
Activity 1.4
m. South Africa has never experienced an inflation rate
above 10 per cent.
n. The depreciation of the rand in 2002 had no impact on
the inflation rate in South Africa.
Activity 1.5
o. The labour absorption capacity of the formal sector in
South Africa consistently increased during the 1990s.
Activity 1.6
p. A surplus on both the current account and the financial
account of the balance of payments will result in an
increase in foreign reserves.
q. South Africa is in the fortunate position of always having
a surplus on its financial account.
Activity 1.7
r. In South Africa the distribution of income is very unequal.
Tutorial letter 102/2/2012
Macroeconomics 2
ECS2602
Department of Economics
Workbook:
Activities for study units 1 to 9
Bar code
, 2
IMPORTANT VERBS
As a student, you should know exactly what is expected when certain verbs are mentioned
in an activity, check list or examination question. In economics, the most common verbs
used are:
Verb Description
Identify the similarities or differences between facts, viewpoints,
compare
concepts or ideas.
contrast/distinguish/what
is the difference Point out the differences between certain objects or concepts.
between?
define Give a short and concise description of a subject or topic.
Name and give a short discussion of the characteristics of an
describe
object or topic.
discuss Discuss a topic by examining its various aspects.
Explain and clarify to ensure that the reader clearly understands
explain
you.
You should draw a fully annotated diagram. Make sure all the
axes and curves are labelled. The diagram must then be
explain with the aid of (a)
explained in a manner that the reader can follow and understand
diagram(s)
— in other words, tell the reader what is happening in the
diagram.
give/identify/list/name Give only the facts without any discussion.
Here you are usually required to explain your answer with the aid
illustrate
of a diagram (or figure).
, 3 ECS2602/102
An overview of the
South African macro-
economic
1
environment
Activities 1.1 to 1. 7
Once you have worked through this study unit, you should be able to give an overview of
the performance of the South African economy with regards to the following
macroeconomic aspects:
• economic growth
• business cycle
• stabilisation policy
• inflation
• unemployment
• balance of payments
• distribution of income
Indicate whether the following statements are true or false:
Statement True False
Activity 1.1
a. Macroeconomics studies the determination of the level
of output and income for a specific firm.
b. In macroeconomics we focus on the determination of
the demand for and supply of individual goods and the
determination of their prices.
c. In macroeconomics we focus on the interaction between
different markets, such as the goods market, the financial
market, the labour market and the foreign exchange
market.
d. Given the following information the economic growthrate
for year 2 is 4.67% :
Real GDP for year 1: R1 751 499 million
Real GDP for year 2: R1 673 259 million
e. Since 1993 economic growth has always been positive
in South Africa.
, 4
f. Real GDP per capita is widely used as a measure of
economic welfare or wellbeing of the residents of a
country.
g. In South Africa the real GDP per capita has con-
tinuously increased since 1993.
Activity 1.2
h. A business cycle refers to the expansion and contraction
of economic activity in a country.
Activity 1.3
i. The main focus of this macroeconomics module is the
study of determinants of the long-term growth potential
of an economy.
j. The impact of fiscal and monetary policy on the level of
output and income is an important topic in this module.
k. The main instrument of fiscal policy is the budget, while
the main policy variable is the interest rate.
l. A contractionary monetary policy implies a decrease in
government spending and an increase in taxation.
Activity 1.4
m. South Africa has never experienced an inflation rate
above 10 per cent.
n. The depreciation of the rand in 2002 had no impact on
the inflation rate in South Africa.
Activity 1.5
o. The labour absorption capacity of the formal sector in
South Africa consistently increased during the 1990s.
Activity 1.6
p. A surplus on both the current account and the financial
account of the balance of payments will result in an
increase in foreign reserves.
q. South Africa is in the fortunate position of always having
a surplus on its financial account.
Activity 1.7
r. In South Africa the distribution of income is very unequal.
